Can Bank Health Affect Investment? Evidence from Japan
Does weakness in the banking sector adversely affect the real economy? If so, how large is the effect? In this article, the author answers these questions for Japan in 1991-92. He tests whether a firm's investment is sensitive to the financial health of its main bank, controlling for stock market valuation and cash flow. Investment is lower by 30 percent at firms that have one of the lowest-rated banks as their main bank. Because the weakest banks deal with few firms, the estimated effect of the problems in the banking sector on the Japanese economy during this period is small. Copyright 1995 by University of Chicago Press.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
When requesting a correction, please mention this item's handle: RePEc:ucp:jnlbus:v:68:y:1995:i:3:p:281-308. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journals Division)
If references are entirely missing, you can add them using this form.